U.S. Justice Dept settles with paperboard companies

WASHINGTON Nov 7 (Reuters) - Flakeboard American Ltd and
SierraPine settled U.S. allegations that they illegally worked
together without obtaining antitrust approval for a deal, which
ended up being scrapped, the U.S. Department of Justice said on
Friday.

Flakeboard and its Chilean parent companies Celulosa Arauco
y Constitucion SA and Inversiones Angelini y
Compania Limitada, agreed to give up $1.15 million in illegal
profits, the department said. Flakeboard and SierraPine will pay
$3.8 million in civil penalties for the illegal coordination,
the department said.

Flakeboard announced in January 2014 that it would buy three
SierraPine mills, which make particle board and fiberboard, for
$107 million. The transaction was called off on Oct. 1 when it
became clear that the deal could not win antitrust approval from
the Justice Department.

While the antitrust review was under way, the companies
closed the SierraPine mill in Springfield, Oregon and shifted
the customers to Flakeboard, the Justice Department said in its
complaint.

As part of shifting the customers, SierraPine gave
Flakeboard competitively sensitive information about the mill's
customers, which Flakeboard gave to its sales people, the
complaint said.

Similarly, SierraPine directed customers who approached its
mill in Martell, California, for products to a Flakeboard mill,
the complaint said.

Executives at Flakeboard and SierraPine could not
immediately be reached for comment.
(Reporting by Diane Bartz; editing by Andrew Hay)